Covered Calls

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Getting Started

New Plays, Friday, 07/06/2007

by OI Staff

HAVING TROUBLE PRINTING?

New Plays

Long
Plays

Short
Plays

AHG

EOC

GMRK

RGLD

New Long Plays

Apria Healthcare - AHG - cls: 31.12 chg: +0.60 stop: 28.99

Company Description:
Apria provides home respiratory therapy, home infusion therapy and home medical
equipment through approximately 500 branches serving patients in all 50 states.
With approximately $1.5 billion in annual revenues, it is the nation's leading
homecare company. (source: company press release or website)

Why We Like It:
AHG spent more than six weeks consolidating sideways and building a bottom in
the $28.00 to $29.50 range. The stock broke out higher last week and pushed
through resistance near $29.50, the 50-dma and the $30.00 level. Traders bought
the dip again at $30.00 and shares now look poised to make a run at its highs.
We're suggesting positions with AHG above $30.00. You can jump in now or wait
for another dip in the $30.00-30.50 zone. Our target is the $33.95-34.00 range.
We do not want
to hold over the late July earnings report in about three weeks.
We're placing our stop loss at $28.99. More conservative traders may want to
place theirs closer to $29.50 or even near $30.00.

Company Description:
GulfMark Offshore, Inc. provides marine transportation services to the energy
industry through a fleet of sixty-one (61) offshore support vessels, primarily
in the North Sea, offshore Southeast Asia, and the Americas. (source: company
press release or website)

Why We Like It:
Crude oil futures broke out over resistance to new multi-month highs last week.
This helped fuel new all-time highs for the oil and oil service stocks. Shares
of GMRK, an oil service company, looks poised to breakout from its nine-week
consolidation pattern. Aggressive traders may want to jump in now. We are
suggesting a trigger to buy the stock at $54.55, which is just above Friday's
high. More conservative traders may want to wait for bullish breakout over the
$55.00 level. We are
using a wide (somewhat aggressive) stop loss under $50.00.
You might want to use a tighter stop. Our target is the $59.00-60.00 range. We
do not want to hold over the late July earnings report. FYI: The MACD on the
weekly chart is near a new sell signal but the P&F chart has a bullish (bear
trap) pattern and a $65 target.

Company Description:
Royal Gold is a precious metals royalty company engaging in the acquisition and
management of precious metal royalty interests. (source: company press release
or website)

Why We Like It:
Gold and mining stocks were big winners last week. The strength was almost
sector wide and shares of RGLD managed to breakout past its bearish trendline of
lower highs. The stock does have plenty of overhead resistance but it looks like
RGLD has turned the corner. We're suggesting long positions now but odds are
good we'll see a more attractive entry point on a dip back towards the $25.00
level, which should be short-term support. Watch the 50-dma to be overhead
resistance. Our target
is the $27.90-28.00 range. More aggressive traders may
want to aim higher. FYI: The P&F chart is still very bearish.

New Short Plays

Empresa Natl. Elec. - EOC - cls: 47.50 chg: -1.05 stop: 50.05

Company Description:
Endesa Chile is an electricity generating company subsidiary of Enersis which
has a presence in five countries in Latin America: Argentina, Brazil, Colombia,
Chile and Peru. It has 46 electricity plants and an installed capacity of
12,332.8 MW. (source: company press release or website)

Why We Like It:
This new short play is based on the technicals. Virtually all of EOC's daily and
weekly technical indicators have turned bearish. The stock has produced what
appears to be a bearish double top with the April and June peaks. The last two
weeks have seen multiple failed rallies under the $50.00 level. Now shares are
breaking down under the 50-dma. We're suggesting shorts with a target in the
$43.00-42.50 range. We do see potential support at the rising 100-dma around
$45.00 so don't
be surprised by a bounce. We do not want to hold over the late
July earnings report.